33 Guidelines for investing in real estate.............

Guideline #5:   Location, location, location.

One very important word that bears repeating again and again makes up Guideline #5.

Location, location, location.

All real estate is not created equal.
 
An acre of commercially zoned land, on a busy commercial street, situated on the far corner of an intersection with a traffic light, may be worth twice as much as the acre adjacent to it that is not at the corner.  It might be worth ten times as much as an acre located a half mile away on a side street.  The same general theory applies to residential real estate.  Some neighborhoods better support home values than others.

It is mighty important to remember, however, that real estate assets are fixed to a specific location, and the specific location is fixed to a specific neighborhood, and the specific neighborhood is fixed to a specific community.   A fabulous location today may not be so fabulous twenty-five years from now.  On the positive side: a new road, a new mall, a new industry moving in just outside of town can all impact values - making winners and losers.  On the negative side:  think Detroit.

Investing in a community that is focused on growth and improvement is a good idea.  Being realistic about the nature, and future prospects, of the location is a better idea.  

Don't forget Guideline #4.